Section 354 | Loans: no claim after disposal or excessive repayments or receipts of value

(1)If the investment consists of a loan, no claim may be made in respect of a tax year if—

(a)the investor disposes of the whole or any part of the loan before the qualifying date relating to that year,

(b)at any time after the investment is made but before that qualifying date, the amount of the capital outstanding on the loan is reduced to nil, or

(c)before that qualifying date, paragraphs (a) and (b) of section 362(1) (repayments of loan in 5 year period exceeding permitted limits) apply in relation to the investment (whether by virtue of section 363 (receipts of value treated as repayments) or otherwise).

(2)For the purposes of subsection (1)(a) any repayment of the loan is to be ignored.

(3)For the purposes of this section the qualifying date relating to a tax year is the next anniversary of the investment date to occur after the end of that year.